State Income Tax Definition

Income tax levied by individual U.S. states based on earned income. States use these funds for education, health care, and other needs. Not all states have a state income tax, and the percentage rates vary.

State Income Tax Extended Definition
Like federal income tax, state income tax is a payroll liability deducted from an employee’s paycheck. Employers must remit this liability according to the required time frame for their business.

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An Overview of State Income Tax

Last Updated By

Rachel Blakely-Gray | May 01, 2023

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